More Stories

Informist, Monday, Oct. 26, 2026

 

NEW DELHI – The Supreme Court Monday held that improved profitability of a debt-ridden company going through the corporate insolvency resolution process cannot be the only reason to refuse approval for the resolution plan if it meets the requirements under The Insolvency and Bankruptcy Code, 2016. The committee of creditors cannot seek to withdraw an approved resolution plan that has gone to the National Company Law Tribunal for approval only on the ground that the debtor's condition has improved considerably, the court held. "...we are of the opinion that the withdrawal of an application can only be till the CoC (committee of creditors) approves the plan... After it is placed before the adjudicating authority there can be no withdrawal either of the application or the approved resolution plan," the court said.

 

On approval of the resolution plan, the court said the committee of creditors does not become "functus officio", or lose its authority. It is empowered to decide all matters except those that affect the plan submitted to the tribunal, the court said. The court's earlier finding that the committee of creditors continues to exist until the resolution plan is implemented does not detract from the essential binding nature of the plan approved by the lenders' panel, it said.

 

The court said the Mumbai bench of the tribunal should decide on the contentions raised by the successful resolution applicant, including S.M. Kamal Pasha, and deb-ridden TD Toll Road Pvt. Ltd.'s holding company Reliance Infrastructure Ltd. These contentions should be decided while dealing with the approval of the consortium's resolution plan for TD Toll. The tribunal has to see whether the resolution plan meets the requirements, after verifying the current financial position of the corporate debtor, together with the cash balance juxtaposed with the terms of the plan, it said.

 

The court was hearing a plea by the committee of creditors of TD Toll Road. The committee includes Bank of India, Canara Bank, India Infrastructure Finance Ltd., Union Bank of India, UCO Bank, and Punjab National Bank. The lenders had argued that TD Toll Road's financial position had improved over the years when the resolution professional was in management. The successful resolution applicant would therefore have a windfall gain, having to bring in a lot less than stipulated in the resolution plan, they said. 

 

The original proposal was for a resolution amount of INR 1.73 billion, when TD Toll Road had an opening balance of INR 300 million, the lenders said. Later, the opening balance had risen to INR 1.65 billion, which would confer a windfall gain on the successful resolution applicant, they said. The members of the creditors' panel and the resolution professional sought the issuance of a fresh Form G inviting expression of interest for TD Toll Road.

 

On the other hand, the erstwhile promoters of TD Toll Road, the holding company, also supported withdrawal of the resolution plan, but on different grounds with different consequences. They urged that the insolvency process itself be abandoned since they are willing to offer a one-time settlement to the creditors.  End  

 

Reported by Surya Tripathi

Edited by Rajeev Pai

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.